The rights of cohabitees- time for a change?

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Law Reform Competition                                                                             Julia Kidd

The rights of cohabitees- time for a change?

Presently in Ireland legislation empowers the court to redistribute the property of a married couple on separation.  When assessing redistribution the court is entitled to look at a number of factors including ‘any contribution made…. by looking after the home or caring for the family’.  The effect of this legislation is that a spouse who is divorced after 20 years working in the family home and bringing up children will have provision on separation.  However if the person in question never got married they will get nothing, unless they have made some financial contribution during the relationship.

Whilst equity may alleviate some of the injustices arising when cohabitees separate it will not provide a remedy in all situations where fairness requires one.  The purpose of this essay is to show that legislative reform is needed with respect to cohabitation and that this would not undermine the institution of marriage.  I will look at legislation and proposals for reform in other jurisdictions and then suggest a possible model for Irish reform.  

Inadequacies of Irish law

The equitable doctrine of the resulting trust was applied to matrimonial property disputes in C v C.   Kenny J held that if a wife has made direct financial contributions to the purchase price of a house or its mortgage repayments, then the husband becomes a trustee for her of a share in the house proportionate to the size of such contributions.  A non-owning cohabitee today who has made direct financial contributions to the purchase or mortgage of a house could rely on this case to obtain a beneficial interest in the property on separation.

The ambit of the resulting trust was expanded in McC v McC when the Supreme Court held that if a wife makes financial contributions to a ‘general family fund’, in the absence of any express or implied agreement to the contrary, the court will infer a resulting trust in her favour.  Whilst the resulting trust may thereby alleviate unfairness for the cohabitee who has made indirect financial contributions its inadequacy is evident in this case.  The wife, having contributed significantly to the cost of the first family home was given no beneficial interest in the second.  This was because the resulting trust is only effective in respect of the purchasing of property.  

The consequent unfairness of this is shown in 3 instances.  In NAD v TD the wife had contributed over one-third of the cost of building a family home on the husband’s property but a resulting trust could not be applied in her favour because the husband had always owned the legal and beneficial interest in the property.  

Secondly, improvements on the home carried out by one party do not give rise to any beneficial interest.  Thirdly, work done in the home is not recognised by the resulting trust.  In L v L the wife had not made any financial contributions to the mortgage or a family fund, but had spent most of her time running the household and looking after the children of the marriage.  Finlay CJ held that to extend the doctrine of the resulting trust to situations where the non-owning partner had made no financial contribution, would be to introduce a new doctrine and hence be ‘usurpation by the courts of the function of the legislature’.

In N v N however Finlay CJ did extend the resulting trust to a situation where similarly there had been no financial contribution by the non-owning partner.  He stated that the activities of a wife in managing and maintaining bed-sitter apartments belonging to her husband’s business gave rise to a beneficial interest in the family home for her.  This highlights inconsistency in the Irish approach. 

The need for legislative reform

The resulting trust is only applicable in the purchasing of property and so cannot take into account improvements and work in the home on separation of cohabitees.  Therefore at present injustice will arise if a cohabitee in a long stable relationship forgoes a career to work in the home and bring up children.  In L v L Finlay CJ prevented the expansion of the doctrine of the resulting trust to deal with this problem hinting that any solution must come from the legislature.

The courts of England, Australia, Canada and New Zealand have addressed the same situation. Each has expanded the doctrine of trusts in a different way to enable them to redistribute property taking into account a wide range of factors including work in the home.  Whilst nothing can be gained from these innovations in light of L v L, the ultimate lesson from these jurisdictions may be that each of them has either implemented or are considering legislation in this area.

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If the need for legislation and the lack of alternatives is clear, the question must be asked: why do we not have such legislation?  The answer is not legal, but political, and not the focus of this essay.  Nonetheless the need for such legislation is compounded by the recent increase in cohabitation.  Cohabiting couples accounted for 8.4% of all family units in 2002 compared with 3.9 % in 1996.  The purpose of the remainder of this essay is to show the weakness of any legal arguments against legislative reform and to draw on the experience of other jurisdictions in ...

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